Petrol over-recovery of 42c/l

News24.com 03/04/2003 16:39  - (SA)  

Johannesburg - Data published on Thursday showed that there was a 42.097c per litre (c/l) over-recovery in the petrol price in South Africa on April 2, the first day of the April retail petrol price.

The 178.586 c/l basic petrol price was the lowest in 15 months as the last time it was this low was on January 25 2002, when it was 175.5272 c/l.

The retail petrol price is adjusted every month on the first Wednesday of the month in accordance with the previous averaging period's over- or under-recovery.

The April averaging period was for the period February 26 to March 25 and resulted in an average over-recovery of 7.992 c/l. This however did not result in a retail price drop of similar magnitude, as the government imposed various additional taxes at the beginning of its fiscal year, which is April 1. Consequently the retail petrol price rose by 5c/l instead of declining by 8c/l.

No more additional taxes are due this fiscal year, but there could be increases in the margin given to retailers or wholesalers. If there are no additional levies, then South African consumers could be looking at a 40c/l (or more) drop in the retail petrol price on May 7.

The value of the Organisation of Petroleum Exporting Countries' (Opec) basket of seven crude oils averaged $25.76 a barrel on April 2, a 22.2% decline since the recent peak of $33.11 reached on March 10.

Set in 1986, the basket is based on the average prices of Algerian Saharan Blend, Indonesian Minas, Nigerian Bonny Light, Saudi Arabian Arab Light, Dubai Fateh, Venezuelan Tia Juana Light and Mexican Isthmus crude oils.

Major oil producer Saudi Arabia has boosted its crude production in early April to 9.6 million barrels per day (bpd), 100 000 bpd higher than its March average of 9.5 million bpd and more than 1.6 million bpd in excess of its 7.963 million bpd Opec quota, according to the US Energy Information Administration (EIA).

The EIA's March estimate of Saudi production was 700 000 bpd higher than its February estimate. The EIA has updated its estimates of Opec countries' production on a daily basis since the early days of the US-led war on Iraq, which started on March 20.

The EIA attributed the recent record US import levels for the week to March 28 to a sharp increase in supplies from Saudi Arabia and higher volumes from Nigeria and Venezuela.

The higher level of imports helped boost US commercial crude inventories to above 280 million barrels for the first time since mid-December 2002.

The EIA estimated total Opec production for March at 27.6 million bpd compared with 27.05 million bpd in February.

The March total includes Iraqi production at 1.35 million bpd compared with 2.49 million bpd in February.

Excluding Iraq, the ten Opec members with quotas pumped an average of 26.3 million bpd compared with their February production of 24.57 million bpd and 1.8 million bpd more than their 24.5 million bpd output ceiling, the EIA said.

Apart from Saudi Arabia, the biggest jump in production came from Venezuela, which the EIA reckoned boosted output by 900 000 bpd to 2.3 million bpd in March as the Venezuelan oil industry continued to recover after a strike that began in early December. The EIA estimates that Venezuela is currently producing 2.5 million bpd.